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The new sheriff in Indiana

Browning's consolidated approach to state IT could make mega deals, but few fans

By Ethan Butterfield

May 26, 2006

Karl Browning

Age: 57Title: CIO, Indiana Office of Technology

Goals: Catalog the state's IT contracts, consolidating as many as possible to reduce redundancies and save money. The technology office also is working to centralize IT procurements to take advantage of economies of scale to get better prices for state agencies. The office also is setting performance metrics to help state agencies better judge the value of contracts and make more informed procurement and contracting decisions.

Resume: Worked for EDS Corp. and Perot Systems Corp., both of Plano, Texas. At Perot Systems, Browning was director of insurance operations. More recently, he was a senior vice president and CIO for Golden Rule Insurance Co., Lawrenceville, Ill.

Indiana CIO Karl Browning

Courtesy photo

When Karl Browning left the Lawrenceville, Ind., offices of the Golden Rule Insurance Co. for the last time and became Indiana CIO, he took with him the business savvy of a private sector CIO.

Browning, whose resume includes stints with two Ross Perot companies, EDS Corp. and Perot Systems Corp., had learned firsthand how to fine-tune private sector operations and business processes to drive down costs. By the time he'd reached Golden Rule Insurance, Browning had honed his business management skills sharp enough to help him cut the company's IT costs by 20 percent annually.

Those same skills made Browning an attractive candidate for state CIO, according to Indiana Gov. Mitch Daniels (R). The former U.S. Office of Management and Budget director-turned-governor in 2005 hired Browning to help the Hoosier State get more bang for its IT procurement buck.

Browning is intent on using IT to make the state's government run more efficiently and with far more oversight of contracts and performance for both government agencies and private-sector partners.

For the next year, Browning said he plans to remain tightly focused on helping the governor drive down the cost of government operations.

"It's just squeezing out the redundancy of efforts amongst the agencies," he said.

Mission mandate

Browning's chief missions are to consolidate contracts, centralize buying and set performance metrics to guide better procurement decision-making. The initiative is in step with similar efforts in as many as a half dozen other states, including California, Texas and Virginia, to implement private sector purchasing practices that can drive down costs.

The short-term results may lead to eliminating or renegotiating many contracts, Browning said. In the 15 months Daniels has been in office and Browning has been working to weed out redundant contracts, the CIO estimated the initiative has saved the state between $50 million and $70 million.

Indiana's consolidation effort could hurt company revenue in the short term as contracts are renegotiated or dropped, Browning said. But ensuring that a company is making its bottom line is not the state's responsibility, he said.

No company has complained to Browning over his consolidation efforts, but, he said, "the body language and the politicking would suggest that they don't like it very much."

John Kost, managing vice president for worldwide government research with market research firm Gartner Inc. of Stamford, Conn., said the consolidation likely will open up Indiana's playing field to more IT companies.

"Changing your environment and moving from highly decentralized to [a model] that's much more consolidated, and introducing new IT services and approaches is clearly going to open the door to new opportunity," Kost said.

One of Browning's chief tasks while consolidating state agency contracts and improving program oversight is setting performance metrics. When Browning took over as CIO, he realized that getting an inventory of state contracts was impossible, because no list of contracts existed, a typical problem in state governments, Kost said.

Among Browning's first moves was to initiate an agency-by-agency review to inventory the state's contracts and analyze their importance. Seeking help in assessing the contracts, Browning found a tool set already in state arsenals: a suite of tools from Altiris Inc. of Lindon, Utah.

Only about half of Indiana's agencies have had their contracts reviewed and consolidated, Browning said. He anticipates completing his agency-by-agency review over the next year.

Using such tools and initiating contract evaluations is an approach Daniels brought with him from his OMB experience, Kost said. His familiarity with it may even date from his earlier work at Eli Lilly and Co., the Indiana pharmaceutical giant where Daniels was president of North American operations, he said.

"He has always been a person who likes to have government be competitive and accountable," Kost said.

The greater understanding of what Indiana has and what its needs are has helped the government to be smarter in procurement and kept the state from renewing contracts with no concept of their value, Browning said.

"Instead of being shanghaied into signing off on a contract because tomorrow we will be without the service, we now look at those prospectively and ask, 'Do we really need this?' " he said. "If not, then we eliminate it, or we try to determine what we really need out of it, then go and renegotiate the terms."Such moves will lead to discarding some contracts, but long term, the move to buy on an enterprisewide scale likely will mean far larger deals, Browning said. And the opportunities promise to be widespread.

Nearly every state agency is going through a substantial acquisition or update of key IT systems, Browning said.

All options welcome

Indiana's largest IT deal today, held by EDS, is its fiscal agent contract for Medicaid management information system. Federal Sources Inc. of McLean, Va., reported that the state likely will extend the contract for two years beyond its expiration in 2007. While FSI estimates the value of the new contract at $120 million, it did not offer a projected contract length.

But the fiscal agent contract could be affected by the state's continuing effort to outsource the Indiana Family and Social Services Administration's eligibility determination functions, Browning said.

The state is evaluating bids from teams led by Accenture Ltd. and IBM Corp. for an eligibility outsourcing deal that could be worth as much as $1 billion. Browning said the privatization contract, scheduled for award this summer, is "huge in terms of its impact on the social services arena."

The eligibility outsourcing initiative has met with resistance from some citizens of Indiana and area media.

Nevertheless, Browning and Daniels are to be credited for their willingness to stick to their guns and push for cost-reducing measures, said Tom Clarke, BearingPoint Inc.'s senior manager for Indiana.

"They're more open to weathering the controversy and not letting it necessarily detract from the overall end goal," Clarke said. "The intent is to provide better services at lower costs to the taxpayers."

Also this year, the Indiana Office of Technology is evaluating whether to proceed with implementing a wireless network. Browning said he expects to decide on it this summer. Up for consideration is whether the network would be solely for government use or extended to include use by the public and, if so, in what capacity, he said.

A further contract, to revamp the state's Web site, was set for award just after press time. Browning shied from estimating the value of that contract, but said the state's Web site generates between $8 million and $9 million annually from license fees. He said Indiana would like to use a fraction of that to pay for the redesign and use the rest for state projects.

The combination of a call center and the new Web site would allow for far greater communications with citizens, Browning said. Whether the call center would be created in house or be outsourced has yet to be determined.

"Neither option is closed," he said.

Staff Writer Ethan Butterfield can be reached at ebutterfield@postnewsweektech.com.

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